2023 Solar Incentives Guide for Henderson, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Henderson.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Henderson?
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the state of Kentucky, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Don't forget to speak with your Henderson utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Your local Henderson solar panel installation expert can give you more information about the ITC and how it applies to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Henderson solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these may include rebates, tax credits and more. Certain incentives are ongoing, while others are only available for a limited time. They might be given by your county or municipality, or by the Kentucky government.
Next Steps for Installing Solar in Henderson
Solar incentives might come from your local utility company, the federal government or the Kentucky government. The variety of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Your local Henderson solar panel installer can help you learn more about which incentives you might qualify for, and get you on track to switch to renewable energy today.
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EcoWatch's Henderson, KY Solar Incentives FAQs
How do I know if I qualify for solar incentives?
It's a smart idea to get in touch with your local Henderson solar installer to get an understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided by the Kentucky government, may have additional requirements.
How much can I save annually on my electric bill if I add solar panels to my Henderson home?
Once you add solar panels to your Henderson home, you can expect to save about $924.55 per year, or about $17,566.40 over 20 years.
What are some environmental benefits of installing solar panels on my home?
You can lower your carbon footprint by 400 pounds of CO2 annually when you switch to solar panels. This adds up to approximately 8,000 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
If I trade in my appliances for ones that can utilize solar energy, are there benefits that I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and getting the most money possible.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.